The Health Service Executive (HSE) has said it could face losses of between €5 million and €7 million as a result of its dealings over recent years with a particular medical devices company that provided respiratory technology during the Covid-19 pandemic.
HSE chief executive Bernard Gloster will tell the Dáil Public Accounts Committee on Thursday there is “no hope” of recovering losses.
“In simple terms, the HSE was buying an unprocured product, was discharging payments on invoice with no adequate check as to the stock received, made a double payment of €723,000, cannot fully estimate stock not drawn down and has no hope of loss recovery,” Mr Gloster says in an opening statement to the committee.
“The overall loss could be in the order of €5 million – €7 million. While I believe the context and circumstances of this case are extreme, it clearly indicates the need for expedited reform of the HSE control environment and systems.”
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The Irish Times reported in July that one company had been paid more than €720,000 twice by different parts of the health service on foot of the same invoice. No cross-checking had been carried out.
The company concerned subsequently went into liquidation.
Mr Gloster says between 2020 and 2024 “the HSE maintained an unprocured relationship with a supplier of respiratory technology, considered quite effective in some instances for monitoring respiratory conditions during the pandemic.
“Between 2020 and 2024 the HSE spent €15 million with the provider.”
He said, on becoming aware of the case, he had instructed several examinations be carried out and legal advice be sought.
He will tell the committee that on taking up the role of chief executive in 2023, he had outlined the implementation of a new integrated financial management system (IFMS) in the HSE as a significant priority.
In a separate briefing paper submitted to the Public Accounts Committee, the HSE said it acknowledged there were control weaknesses observed in relation to supplier payment controls and its annual report had set out a number of steps taken particularly in relation to the prevention of duplicate payments.
“The HSE is now fully on IFMS, and all payments are centralised on one financial system rather than the numerous legacy systems previously in place. IFMS provides reporting functionality that can identify potential duplicate payments.”
It said it noted specific control issues in relation to one supplier of respiratory monitoring mechanisms.
“During the early stages of the Covid-19 pandemic and in particular during 2020 due to the significant challenges in the global marketplace, normal procurement processes were not always possible.”
The HSE said it had carried out significant work to ensure that all other similar suppliers contracted during the pandemic had been regularised in accordance with normal procurement procedures.
